There in lies the problem, the Fed reserve uses "Federal Reserve Notes" and it bought its own debt. It is like a homeowner "creating" his own currency backed by the full faith and his household, to buy back the debt and have no mortgage. All this is dependent on everyone "thinking" and "having faith" in the dollar. Once that flies away, we are well and truly screwed. You will be able to light a cigarette with a 100.

(pt back up!)

The size of the debt taken on by govs, the US in particular, is intriguing.
But there is something new about his debt, it is hard to define who owns it. In the US it is the Federal Reserve Bank.
What is, or who is this bank? It is controlled by its sole debtor, well maybe as some say it is the other way round. Either way, it is substantially the same people. The way I see it, the reserve will not call in the debt, the debt is unlikely to be repaid, all quite harmless. Or is it? I just have not thought this thru but have governments invented a perpetual motion type machine for creating money?
If it works, why not abolish taxes and pay back all loans not from the Res Bank? Gov borrows whatever it needs from money created by the Res Bank without limit., amounts just go up, and up. Govs have no financial limit at all.
There are no losers - excluding the public whose savings are depleted by inflation, and investors crowded out by government and their cronies who can invest as their money is costless.
Private and corporate money become a smaller and smaller share of transactions, only gov money exists. So, without any new laws, government gets complete control of the economy. Bingo!